2 weeks Ago By [email protected](KoreaTimes)
Officials speak to the audience about the Korean financial market during an investor relations event at a hotel in Hong Kong, Wednesday. From left, Hana Financial Group Chairman Ham Young-joo, Financial Supervisory Service (FSS) Governor Lee Bok-hyun, Shinhan Financial Group Chairman Jin Ok-dong and Korean Re CEO Won Jong-gyu. Courtesy of FSS Demographic challenges key reason driving state-led initiative By Lee Yeon-woo HONG KONG — Korean financial firms reaffirmed their commitment to the long-term implementation of the Corporate Value-Up Program during talks with investors in Hong Kong , Wednesday.
They emphasized their determination to follow through with the government-led initiative aimed at addressing the undervaluation of the Korean stock market. "The top concern among investors is whether the Corporate Value-Up Program will be sustained and whether we are serious about it. So I assured them that we are," said Shinhan Financial Group Chairman Jin Ok-dong, speaking to reporters after an investors relations (IR) event at a hotel in Hong Kong.
Introduced this year, the initiative aims to tackle the undervaluation of the Korean stock market by enhancing corporate governance and boosting shareholder returns. Financial firms have been key participants in the program, taking the initiative to announce measures aimed at boosting shareholder value in their disclosures. "The government is serious, the financial authorities are serious, and Korean firms are serious, based on the belief that this is the only path forward for Korea," Jin added.
His remarks followed the IR event, which was co-hosted by the Financial Supervisory Service (FSS) and major financial institutions, including Shinhan Financial Group, Hana Financial Group, Korea Investment & Securities, and Korean Reinsurance Company (Korean Re). According to the FSS, the event attracted 230 participants from 102 institutions. During the event’s Q&A session, Jin cited Korea’s demographic challenges as a key reason for driving the initiative to bolster the stock market.
"Korea’s public pension system currently provides an income replacement rate of just 42 percent. At this pace, the aging of society will place an immense financial burden on the government. To address this, private pensions and individual savings accounts are essential," Jin said.
Korean Re CEO Won Jong-gyu emphasized the importance of consistent communication between companies and shareholders, likening the relationship to that of a married couple. "Since I became CEO in 2013, our company has announced ambitious plans every year and worked hard to achieve them. We have grown, but market sentiment has not always reflected that.
Back then, Korean investors held 40 percent of our stock, but this has dropped to 26 percent," Won said, underscoring the need for better communication. To create a more predictable investment environment and strengthen shareholder trust, Korean Re has maintained a dividend payout ratio of 30 percent since 2018 and issued bonus shares averaging 20 percent annually over the past three years. Based on these measures, Won expressed his hope that Korean Re can continue to grow as a company trusted by shareholders.
Financial authorities also vowed to ensure consistent efforts going forward. FSS Governor Lee Bok-hyun said, “With two and a half years left in this administration’s term, I promise that we will continue to communicate with the market and work toward advancing Korea’s financial system.”.
